ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Excise Irritants

Excise Irritants Hansavivek STRAW PRODUCTS has produced good results for 1984 with increases in production, sales and profits. Production of paper and board was higher at 65,848 tonnes against 61,807 tonnes in the previous year. Production at the paper mills in Orissa reached an all-time high. The output of board mills located at Bhopal would have been substantially higher but for the tragic incident of gas leakage from the Union Carbide India's plant there in December last resulting in complete dislocation of normal operations for nearly a month. There has been an improvement in the demand for paper, but the market for kraft paper and duplex board remained sluggish. The high excise duty differential enjoyed by smaller units in the case of these varieties affected the company's board mills. The directors feel that the increase in excise duty on certain varieties of paper produced by large integrated units through the Union Budget for 1985-86 may affect the sales of the integrated paper mills. They also contend that the increase in the price of the controlled variety of white printing paper from Rs 5,400 to Rs 6,400 per tonne in May 1984 is still "far too inadequate" to cover the cost of production and the industry continues to suffer heavy losses on this account. The full requirement of raw materials for the paper mills in Orissa could not be met from the company's leased forests, and sizeable quantities had to be brought in from distant regions like Assam, North Bengal and Maharashtra or purchased otherwise at considerably higher costs. Exemption of import duty on wood pulp should help the paper industry to overcome to some extent the difficult raw material position. About 20 per cent Of the coal required at the paper mills had to be transported by road at higher cost and the quality of coal continued to be poor. With the recent hike in railway freight, increase in the price of petrol and petroleum products and general rise in prices, the costs will be further pushed up. The company is implementing a Rs 23-crore scheme of modernisation and renovation of its paper mills in Orissa, which was set up in 1962. Orders for most of the equipment have been placed. The scheme would be implemented before the

R and D Based Growth

R and D Based Growth Hansavivek HINDUSTAN LEVER is setting its sights higher. It has submitted applications to the government for approval of investments in several projects in chemicals, petrochemicals, export-oriented ventures, etc Meanwhile, its fertiliser complex project at Haldia in West Bengal has reached an advanced stage of erection. The drug intermediate project at Jammu has already been commissioned. The export-oriented herbicides project at Kandla was commissioned in June 1984 and the company exported 528 tonnes of the product during the year. The company has turned in good results for 1984 which was the first year when the full impact of transfer of domestic businesses of edible fats, dairy and AFS to Lipton India, pursuant to the scheme of reorganisation, influenced business operations. The company's turnover amounted to Rs 539 crore against Rs 501 crore in the previous year, even though Rs 66.60 crore relating to the transferred businesses was excluded. The increase of turnover from the rest of the businesses more than made up for the shortfall attributable to the transfer red businesses. Gross profit was only a shade lower at Rs 54.85 crore against Rs 55.98 crore. With reduced provisions for depreciation and taxation, however, net profit increased from Rs 18.56 crore to Rs 21.68 crore. The total dividend of 24 per cent is covered 1.93 times by earnings as against 1.77 times previously. The company continued its thrust in exports, and export turnover, including that of subsidiary, reached a new high of Rs 74 crore. The new 100 per cent export-oriented ventures in the KFTZ for the manufacture of herbicides and garments registered export orders valued at over Rs 13 crore in the very first year of commercial production. The company also made fresh inroads in the North African markets by exporting detergent powder and packaged tea, and consolidated its position in Europe and Japan for exports of value-added sal fat. Prices of non-edible soap making oils increased abnormally during the year.

Beyond Textiles

Beyond Textiles Hansavivek RELIANCE TEXTILE INDUSTRIES continues to forge ahead on the path of diversification of its activities. It has already secured government clearances for the polyester staple fibre (PSF), purified terephthalic acid (PTA), mono ethylene glycol (MEG) and linear alkyl benzene (LAB) projects. With the available expertise in terms of manpower, the potential of the company has been greatly improved to surpass its own' track record in speedily implementing various projects involving an outlay of Rs 674 crore. The company has already negotiated foreign exchange requirements equivalent to Rs 252 crore. It has also reinforced its financial strength by a scheme of extinguishment of debentures of series I, II , III and IV. Of the total outstanding debt of Rs 73.50 crore in the form of these debentures, a sum of Rs 71.63 crore has been extinguished and equity shares in the ratio of 1.4 for every Rs 100 outstanding have been issued in terms of permission received from the Controller of Capital Issues. In order to facilitate the process, the company embarked on an innovative scheme by opening 50 centres ail over the country for the purpose of receiving extinguishment letters as well as fdr the delivery of share/debenture certificates and for rendering prompt and personalised services. The shareholders and debentureholders greatly lauded the company's efforts for alleviating their difficulties. The company issued new 'E' series non-convertible debentures of Rs 150 each of the aggregate face value of Rs 80 crore which was fully subscribed. The company has announced issue of further non-convertible secured debentures of Rs 100 each of the aggregate face value of Rs 100 crore to finance, inter alia, projects relating to polyester yarn/fibre. The formal take-over of the assets of the Chemicals and Plastics division of Union Carbide India at Chembur in Bombay is expected to be completed in the coming weeks. The company proposes to modernise this unit with the latest technology to attain optimum results in terms of turnover and profitability.

Sound Base for Expansion

Sound Base for Expansion Hansavivek ASIAN PAINTS (INDIA), the largest paint manufacturer in the country, has fared so well during 1984 that the board has recommended a three-for-five bonus issue besides stepping up dividend by 5 points to 30 per cent. What is more, the company has planned expansion and diversification of activities to accelerate future growth. On a turnover up from the previous year's Rs 69.38 crore to Rs 91.24 crore, the company has earned a gross profit of Rs 12.08 crore against Rs 9.68 crore. These figures reflect a small contraction of profit margins. But this performance looks all the more encouraging when viewed against the background of critical availability of input materials and the inflationary trend in prices of ail raw materials and containers and packaging goods. The company was able to achieve export sales of Rs 2.25 crore, almost double last year's figure. Net profit amounted to Rs 5.36 crore (Rs 3.69 crore) and the earnings cover for the enhanced distribution increased from 2.80 times to 3.40 times. The company's liquidity position continued to be comfortable and income earned through investment of short term surplus funds amounted to Rs 1.11 crore. In the company's overseas operations, the Fiji subsidiary, Asian Paints (South Pacific), could maintain dividend at 12.5 cents per share of Fiji S one in view of the Counter Inflation (Dividends) (Control) Order, 1984. The demand for paints in the market returned to its normal level after the heavy demand witnessed during the previous year arising from reconstruction activities following hurricane 'Oscar'. Introduction of two new product lines, namely, marine paints and automotive paints enabled the company to restrict the shortfall to the minimum. The subsidiary in Tonga, Asian Paints-(Tonga) has announced a dividend of 20 cents per share of Tonga $ one following higher sales and profits. The company's proposal to set up a joint venture unit with an installed capacity of 400 KL of paints and enamels in the Dominion of Solomon Islands in South Pacific received final approval of the Government of India in October last. The building construction work has commenced and is expected to be completed by October this year. The company's proposal to set up a joint venture unit for the manufacture of 750 KL of paints, enamels and varnishes in the Kingdom of Nepal also received final approval of the Central government. The building construction work has been completed and the equipment is under installation. The plant is expected to be commissioned shortly.

Captive Power Will Better Results

Captive Power Will Better Results Hansavivek GUJARAT STATE FERTILISERS COMPANY (GSFC) is expanding, and diversifying its activities. Its applications for enhancement of capacity of the ammonia plant to the tune of 1,000 tonnes per day as well as of caprolactum capacity by 30,000 tonnes to 50,600 tonnes per annum are in advanced stage of consideration by the Central government. The company has also approached the government for setting up a nylon spinning unit with a capacity of 3,300 tonnes per annum. Meanwhile, it has made rapid strides in implementing a coastal DAP complex of a capacity of 1.5 lakh tonnes of P205 per annum, as sanctioned by the government. Considering various techno-economic reisons, it has been decided with the approval of the authorities to locate this complex around Sikkaport in Jamnagar district. The site consists mostly of government waste lands, a major part of which has been acquired by the company. The contract for the main DAP process plant has been awarded to Hindustan Dorr Oliver, Bombay, and the work of selection of other major consultants/con- tractors is in progress and expected to be finalised soon. Setting up of all the necessary infrastructural facilities for development of Sikka port for handling imported raw materials, namely, ammonia and phosphoric acid is being organised jointly by the company and the state government. The scheme of amalgamation of Polymers Corporation of Gujarat (PCG) with the company with effect from January 1, 1983 has been approved by the Gujarat High Court. Attendant formalities for final approval of the Specified Authority under the provisions of Section 72 A of the Income-tax Act and consent of the Controller of Capital Issues for issue and allotment of shares as per the exchange ratio as also the bonus shares, are being completed. The accounts of the erstwhile PCG are incorporated in the accounts of GSFC for 1984. Assets and liabilities as on January 1, 1983 of the erstwhile PCG have been taken over at book value and further, as per stipulation in the scheme of amalgamation, the $hates of GSFC will be issued. The excess of liabilities over assets as also the value of shares to be issued have been treated as goodwill.

Clearing the Decks for Growth

Clearing the Decks for Growth Hansavivek STANDARD MILLS COMPANY'S management structure is being reorganised. It has been decided that it should be a board managed company and the day to day affairs of various divisions be entrusted to the president of each division. Accordingly, Rasesh N Mafatlal has resigned from the office of Managing Director. He will, however, continue to be th- Chairman of the board. V Ramdurai and C C Maniar have resigned as whole-time directors and are being employed as executives designated as presidents of the chemicals and textiles division, respectively. Yogindra N Mafatlal resigned as a director from June 11, 1984 and Pradeep R Mafatlal was appointed as a director in the casual vacancy caused by his resignation. Jayantilal D Vasa resigned as a director and Madhav L Apte was appointed in the casual vacancy so caused. In pursuance of a special resolution approved by The Week's Companies the members in 1980, the company has been paying commission upto one per cent of the net profits to the directors other than Managing Director and the two whole-time directors, Taking into consideration the contemplated board managed nature of the company's management, it would be permissible to pay as remuneration an amount of three per cent of the net profits to the directors.

Good Performance Likely to Continue

Good Performance Likely to Continue Hansavivek SOUTHERN PETROCHEMICAL IN- DUSTRIES CORPORATION (SPIC) is expanding and widely diversifying its activities. It is seeking permission to set up plants for manufacture of 900 tonnes of ammonia and 1,500 tonnes of urea per day at Tuticorin at a cost of Rs 400 crore. A letter of intent for increasing the capacity of the DAP I plant has been received by the company and is being taken up for implementation this year. The capacity of the plant will increase from 500 to 850 tonnes per day. The erection of the gypsum board pilot plant is in the final stage of completion. This would enable the company to find alternate use for the byproduct, gypsum, produced by the phosphoric acid plant. At present the company is importing about 1.2 lakh tonnes of phosphoric acid in addition to its own manufacture to meet the requirements of DAP production. With a view to regulating the delivery pattern from various overseas suppliers so that its production is not affected, the company is considering purchase of a ship for about Rs 15 crore for carrying phosphoric acid. Clearance from the Central government in this regard is awaited. The implementation of the fluorine recovery plant as a means of pollution control and as an intermediate for by-product manufacture is in an advanced stage and is expected to be commissioned this year. This will be followed by the implementation of the aluminium fluoride project for which clearance for import of components of machinery is awaited from the government. Work on the 18 MW captive power plant is in progress and the unit will be operational by end 1985. This will ensure 100 per cent availability of power for existing plants at Tuticorin. The Tamil Nadu Industrial Development Corporation has chosen the company as a joint promoter for a Rs 130-crore linear alkyl benzene (LAB) project to be located at Manali, Madras. The company will be investing 25 per cent of the equity capital of the new joint sector company 'Tamil Nadu Petroproducts' which will implement the project. The company also proposes to increase its equity share to 25 per cent in Alkali Chemicals and Fertilisers. A new company under the name 'SPIC Electronics and Systems' has been registered to implement a Rs 10-crore project for the manufacture of magnetic tapes. SPIC has taken over, subject to clearances by statutory bodies, on lease the ailing furfural unit of Southern Agrifurance Industries. Various schemes are being considered to put the unit back on the rails.

Diversifying for Rural Market

Diversifying for Rural Market Hansavivek ATUL PRODUCTS is seeking an industrial licence to manufacture 100 tonnes each of the two herbicides, metoxuron and isoproturon. The company has got a letter of intent for the manufacture of 950 tonnes of isocyanates, which are intermediates of these herbicides. On a reassessment of the herbicide market, the company is modifying the project for the diuron plant. It is still awaiting registration of tetradifon from the Central Insecticides Board. Due to serious difficulty faced in procuring meta dinitrobenzene, the company has started manufacturing it for captive use by utilising the spare capacity of its plants. A plant for making monochlorobenzene for captive use is also being installed. The government has finally rejected the company's application for' the manufacture of DAP. The R and D department translated successfully processes for some intermediates on the hydrogenation pilot plant. The plant for removal of mercury from the caustic soda plant effluent, based on a process developed by it, has been successfully commissioned. The department has developed processes for some pesticides and their intermediaries and the company intends to put up plants based on these processes. The work on improving the efficiency of some intermediates and dyes as well as on developing processes for additional products is going on satisfactorily. The modernisation of the naphthol plant was completed and the new plant has been commissioned. The first phase of expansion of the DCP plant from 1,500 tonnes to 2,500 tonnes per annum has been completed. The company has also made changes in the caustic soda plant to improve its product mix.

Deeper into Agrochemicals

Deeper into Agrochemicals Hansavivek NATIONAL ORGANIC CHEMICAL INDUSTRIES (NOCIL) proposes to increase its participation in the agro- chemicals business and is seeking government permission' to undertake manufacture of Phosphamidon and DDVP. The project is estimated to cost Rs four crore. It has also submitted an application for the manufacture of sulphonates and sulphates of linear alkyl benzene/dodecyl benzene/alpha olefins/fatty alcohols and detergents based thereon at a cost of about Rs 6.4 crore. In addition, the company is considering a number of other possible areas for investment and marketing as a means of achieving growth in the future. After successfully overcoming teething troubles of the monocrotophos plant, experienced in 1983, the company has been able to achieve operation of the plant at design capacity despite repeated power interruptions. The company started commercial production at the cyperme- thrin plant in September 1984 and it has been operating smoothly. The petrochemicals plant showed a satisfactory performance during 1984, after four rather poor years. This could be possible as a result of the cumulative effect of steady operations with few breakdowns, careful monitoring of utilities and yields, a continuing search for improved efficiency and operating economies and the beneficial impact of investments on modernisation in earlier years. The company achieved a number of production records during the year, the most significant being the production of nearly 72,000 tonnes of ethylene as against the previous high mark of about 63,000 tonnes reached in 1978.

Entertainment Electronics Bonanza

Entertainment Electronics Bonanza Hansavivek PEICO ELECTRONICS AND ELEC- TRICALS has recorded an impressive recovery in its financial performance from the previous year's setback. Its gross profit has jumped from Rs 8.24 crore to Rs 15.55 crore following increase in turnover crore, reflecting a sizeable increase in

Getting Ready for Competition

Getting Ready for Competition Hansavivek MAHINDRA AND MAHINDRA has shown good results for 1983-84 with higher production, sales and profits. Turnover amounted to Rs 368.33 crone against Rs 314.01 crore in the previous year and gross profit increased fom Rs 22.63 crore to Rs 26.91 crore, reflecting a modest improvement in margins. These results have been obtained despite pressure on costs. Net profit is Rs 14.59 crore (Rs 13.52 crore). Dividend is lowered by two points to 18 per cent, but is payable on the capital enlarged by the bonus issue. The increased quantum of distribution is still covered 4.23 times as against 5.85 times previously. The company produced 32,788 vehicles against 32,077 in the previous year and sold 32,607 against 32,201, even though exports to Iran dropped from 2,976 to 1,829. Sales of spare parts inclusive of petrol and diesel engines rose to Rs 16.30 crore from Rs 13.78 crore. The Igatpuri plant produced Peugeot diesel engine model XDP 4.90 with progressively higher deletions. The International Tractor division fared very well with record production and sales of tractors. The number of tractors produced increased from 11,901 to 15,900 and the number sold from 12,507 to 15,754. The company increased its market share from 17.3 per cent to 19.7 per cent. Sales of spare parts, kits, attachments and implements were Rs 9.64 crore against Rs 8.14 crore. Total foreign exchange earnings from export of vehicles fully built-up and completely knocked down, tractors, spare parts, merchant and deemed exports amounted to Rs 20.84 crore. The instrumentation division's sales of instruments and spares amounted to Rs 1.46 crore against Rs 1.44 crore. The division executed an order for 15 sets of hydraulic regulators, manufactured under the new collaboration agreement with Comp-Air Industrial, UK. The division has concluded selling agency agreements for a range of new instrumentation products manufactured by Pyrosystems, Madras, and Controls and Automation (India), Hyderabad.

Innovations Begin to Pay

Innovations Begin to Pay Hansavivek WIMCO started manufacture of matches in 1923 and is today the country's largest manufacturer. It has spread its activities too. Paper and chemicals were the earliest diversifications, based on matches. Today Wimco is also engaged in the manufacture of metal anodes, processed fruit juices and concentrates, packaging materials and machines. It is the largest exporter of epical fruit products from India and is in the forefront of farm forestry and horticulture. The company has turned in good working results for 1984 with sales, profits and margins higher than those of the previous year. Turnover has increased from Rs 75 crore to Rs 85.30 crore and gross profit from Rs 5.34 crore to Rs 8.29 crore, reflecting a significant improvement in profit margins. Although tax liability has claimed considerably more, net profit is still Rs 3.83 crore compared to Rs 2.32 crore of the previous year. Dividend has been raised by two points to 20 per cent and is covered 2.27 times by earnings against 1.52 times previously.


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